Redundancy- Tax on Compensation

splotgoblins

I will possibly be offered VR in the near future which provide me with a substantial compensation. I will be taxed on anything over £30K, however I am informed that if i do not earn an income the following tax year I will be able to claim back some of the tax paid on the compensation. Is this correct please?

McKneff

So you say compensation, I presume you mean redundancy payment.

If you pay tax in one year which is due, you cannot claim it back in the following year.

Each tax year is treated completely seperately.

If you pay tax on the interest in the following year then you could potentially reclaim that tax but if you had no income you could fill in a form R85 so that your interest would be paid gross, saving you having to go through the reclaim process.